Hospitality Market Research

Online Traveler Population on
Upswing

Over
the past year, according to the hospitality industry report, consumer
confidence in the economy has fallen dramatically (March 2007: 92.3; March
2008: 33.1) with the toll of the ailing housing market, record-high energy
prices and credit crunch (source: RBC Cash Index). While this has made it more
challenging for Americans to secure financing for big-ticket purchases such as
homes and cars, travel has been, to date, marginally impacted. In fact, the
U.S. market is experiencing travel growth as a result of an increase in inbound
travel due to the devaluation of the U.S. dollar.

However,
like all Americans, the U.S. online traveler remains cautiously optimistic
about the economy because of radical stock market swings over the past six to
nine months, increasing fuel costs, the volatility of the banking/investment/
mortgage community, the continuing war in Iraq and the uncertainty associated
with an election year. But these economic factors have not, as of yet, deflated
online traveler penetration. Nearly

one
in four U.S. adults (24%) was an “online traveler” in 2007 (see Table 1). This
penetration is up over 2006 and due primarily to the increase in the adult
population. So, even though the economy is slowing, U.S. online travelers have
not stopped traveling – according to the hospitality industry report: but
they’ve altered how they travel and are making trade-offs in terms of the type
of trips taken, the amount of time spent vacationing and/or the type of
components (i.e., hotel) purchased.

Hospitality Industry Report

To
calculate the number and percentage of “online travelers,” PhoCusWright
multiplied the number of adult Americans (227.5 million, Source: U.S. Census
Bureau) by the percentage of respondents who indicated they had flown by
commercial air in the past year (32%), and by the percentage of respondents who
had stayed in a hotel for leisure travel in the past year (82%). This
translates to 59 million adult Americans. Of these, 92% have also used the
Internet in the past month. This figure in the hospitality industry report (55
million adults, or 24% of the U.S. adult population) equates to the number of
“online travelers” in the U.S. in 2007.